Airbus Industrie

During the 1970s, Europe's Airbus Industrie emerged to become the strongest rival of Boeing, the world's top commercial planebuilder. Though based in Europe, Airbus had its origins in the work of an American executive, Frank Kolk of American Airlines. It was 1966; Boeing had just announced that it would build the enormous 747 airliner. This wide-body jet represented a huge leap beyond the biggest jetliners of the day: the Boeing 707 and the Douglas DC-8.

Kolk took the view that the airlines needed something intermediate in size, carrying more passengers than a 707 or a DC-8 but fewer than a 747. He wanted a wide-body layout, featuring a big cabin with two aisles. But whereas those other jets had four engines, his called for only two.

In Washington, his concept for a wide body twinjet soon bumped up against federal regulations. On a number of routes, those that crossed the Rockies or flew over oceans, regulations called for a minimum of three engines to provide safety if an engine shut down in flight. Three-engine designs thus shaped the American jetliners—the McDonnell Douglas DC-10 and Lockheed L-1011—that grew out of Kolk's initiative. On other routes, a twinjet indeed could comply with the safety regulations.

In Europe, however, America's regulations did not apply. At the French firm of Sud Aviation, the chief engineer Roger Beteille took the lead in urging Europe to build Kolk's big twinjet. Such a project was too big for Sud alone to take on, and Beteille won promises of cooperation from government officials in Britain and Germany. Together they agreed to build such a plane, calling it the Airbus A-300.

At first, the French part of the effort consisted of nothing more than Beteille and a secretary. However, the president of France, Charles de Gaulle, resented U.S. domination of commercial aviation and was eager to build a French or European airliner that could compete with American designs. De Gaulle had pinned his hopes to the Concorde supersonic jet, which just then was encountering delays and cost overruns. Sud Aviation was building Concorde; De Gaulle sought to rescue this program by sending a new man, Henri Ziegler, to take charge of that company. Ziegler also was a strong supporter of the proposed Airbus, and persuaded De Gaulle to give it increased backing as well.

There were close links between the Concorde and Airbus programs, with many key people working on each in turn. For instance, Ziegler was De Gaulle's man who rescued Concorde; he then became president and chief executive officer of Airbus. His successor at Airbus, Bernard Lathiere, had also been a Concorde man. “I loved Concorde as a mistress and Airbus as a son,” Lathiere declared. “At age 44, I decided it was time to give up my mistress and concentrate on my son's upbringing.”

To stir interest within the United States, Airbus leaders selected an American engine, built by General Electric. This did not suit the British, who withdrew from the venture in a huff. However, British expertise soon proved essential in crafting wings for the A-300, That country's firm of Hawker Siddeley was Europe's strongest company in this area, and soon joined the program.

Airbus Industrie took shape formally late in 1970. It was a consortium, an association of corporations, working under French laws governing multinational cooperative programs that relied on government financing. The A-300 first flew in October 1972. However, during the next five years it racked up only 38 orders. In Toulouse, home of Sud, 16 unsold aircraft sat along a fence outside the plant, their tails painted white and showing no airline insignia.

It was desperation time, and the desperation increased when a sale to America's Western Airlines fell through early in 1977. But Airbus had another prospect in Eastern Airlines. Its president, Frank Borman, had been urging U.S. planebuilders to build their own wide-body twinjet but had received no firm response.

Borman now turned to Airbus, arranging to borrow four A-300s for a six-month trial. He soon found that he liked them. Their reliability was excellent; better yet, they used up to one-third less fuel than the L-1011s that he was flying. In the spring of 1978, Borman agreed to purchase 23 of the new jets.

This was a breakthrough. Eastern was one of America's principal airlines; its great prestige ensured that other carriers around the world would take a fresh look at the A-300. During 1978, Airbus went on to sell a total of 69 such jets. The A-300 won new lustre during 1979, the year of an oil crisis that sharply raised the price of jet fuel. As a twinjet, it was lighter in weight and used less fuel than the tri-jet L-1011 and DC-10. Having one less engine, the A-300 also was easier to maintain and less costly to purchase.

In 1978, Boeing responded to the Airbus challenge by stating that it would build its own wide-body tri-jet: the 767. But the 767 existed only on paper, whereas the A-300 was flying with passengers. Airbus Industrie saw that its own opportunities were expanding and responded by offering the A-310, a downsized version of the A-300.

As its sales burgeoned, the consortium received subsidies from its governments that totaled $13.5 billion by 1990. These funds made it possible to develop important new aircraft, and to win sales by offering low, low prices. The first step came in 1984, with the new Airbus A-320. This 150-seat airplane aimed at the low end of the market, seeking to serve numerous routes of short distance that carried only modest numbers of passengers. The A-320 competed with the Boeing 737 and the McDonnell Douglas MD-80 series, which served those routes as well. But there was plenty of demand for aircraft of this size, and the A-320 rolled up large numbers of sales.

In 1986, Airbus took a further leap with another new program, the A-330/340. This took shape as a single airplane that could accommodate either two or four engines. The A-330 was the twinjet version; it was larger than the A-300 and the Boeing 767. The A-340 was the four-engine version. Built for long range, it served transoceanic routes that covered world-spanning distances but attracted too few travellers.

Planebuilders serve the world's airlines by offering an array of designs that cover the most important combinations of range and passenger capacity. The new A-330/340 put Airbus cleanly into Boeing's class, permitting it to sell a line of aircraft having similar breadth. Helped by subsidies, sales of these craft soon were zooming.

In 1989, Airbus posted 412 orders, representing one-third of all worldwide purchases. In 1990 the Europeans sold the largest number of jets smaller than the 747. In 1991 they nearly matched Boeing's new orders on its own turf, in North America. During 1994 Airbus actually overtook Boeing, winning 125 orders to 120 for this rival.

Federal regulators helped spur demand for twinjets. New rules, issued in 1985 and 1988, permitted twinjets to fly the Atlantic. This reflected the high reliability of modern jet engines, which almost never shut down in flight. Responding to this new opportunity as well as to the growing challenge of Airbus, Boeing introduced its own new twinjet, the 777. It is as large as early versions of the 747.

During 2000, Airbus formally initiated a new project, the A-380, and began taking orders. This is to be the world's largest airliner, carrying up to 656 passengers on two complete decks. it may be too large for the market; only a few dozen have sold to date. But with Boeing's 777 competing against the Airbus A-330/340, and with these plane builders continuing their rivalry with smaller aircraft, it will take time before Airbus can establish itself as the world's Number One—if indeed this is possible.